Greensill Government-backed loans ‘went to Gupta-linked companies’
The eight companies were granted £400 million in Government-backed Covid loans
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Collapsed lender Greensill Capital funnelled all of the cash that it lent under a Government-backed Covid scheme to companies linked to businessman Sanjeev Gupta according to reports.
Seven of eight of the Coronavirus Large Business Interruption Loan Scheme (CLBILS) loans that Greensill supplied went to companies that are part of Mr Gupta’s GFG Alliance group, documents seen by the FT show.
An eighth loan was granted to Aar Tee Commodities (UK), a business owned by Ravi Trehan, who was formerly a director at two companies linked to Mr Gupta and his father.
The revelation was made by the Financial Times citing an administrator’s report for Greensill Bank which has been filed in Germany.
The newspaper reported that the GFG Alliance businesses that borrowed under the scheme were: Liberty Pipes (Hartlepool), Liberty Steel Newport, Simec International (UK), Liberty Commodities, Liberty Industries UK, Liberty Merchant Bar and Speciality Steel UK.
Despite only being allowed to give loans of up to £50 million to any single entity, Greensill extended loans of £400 million to the seven GFG Alliance businesses and Aar Tee Commodities.
It was able to do so because the GFG Alliance is just a loose grouping, and does not count as a single company.
CLBILS were designed to funnel cash to businesses with turnovers of more than £45 million a year.
It was introduced after the start of the Covid-19 pandemic forced millions of businesses to change the way they operated.
If borrowers could not pay back the money, the Government promised to cover 80% of the loan. In total £5.3 billion has been lent to 716 businesses as part of CLBILS.
GFG declined to comment. The business, which is trying to refinance the loans it received through Greensill, overnight announced that it had agreed a standstill over its Credit Suisse debts in Australia.
“The six-week standstill agreement will enable GFG Alliance to complete full refinancing of LPMA (LIBERTY Primary Metals Australia), expected to complete within this timeframe,” GFG said.
It added: “Sanjeev Gupta and GFG Alliance’s Restructuring and Transformation Committee continue to make good progress on restructuring and refinancing of the group with all creditors, supported by record steel and aluminium prices, in addition to operational improvement at its major plants.”